At any rate, there's a bit of conflation here. "It scales down" by saying "you can have an isolated community/use case that's oblivious to the rest of the system" is categorically distinct from "it scales down" in terms of "a small node can meaningfully participate with the larger system"
At any rate, the problem with "scaling down" is much clearer when it comes to the problem of "scaling wide".
Or let me put it a different way: ATProto *explodes in complexity* when you try to scale it towards meaningful decentralization